PracticeConsultingCould business be ready to boom?

Could business be ready to boom?

Bullish finance directors believe order books will boom in 2001 despite fears that an impending economic downturn could hold back business growth this year.

An overwhelming four out of five of FDs told the first Accountancy Age/Reed Accountancy Personnel Big Question of 2001 they were confident turnover will increase over the next 12 months.

Three quarters of FDs said a healthy economy was the key to success next year, while a further one in three rated worsening economic conditions as the biggest constraint to business in 2001.

Lack of skilled staff loomed as the biggest possible constraint on business for a third of FDs surveyed, with government red tape (12%), the state of the UK transport system (11%) and indecision over the euro (8%) all figuring as top concerns.

The mixed message comes as UK business braces itself for a slowdown in the US economy, with international financier George Soros this week warning that a global financial crisis looms later this year.

The freshly knighted Sir Edward George, governor of the Bank of England, also said that a US recession would hold back the UK economy.

‘If America really sneezes we all catch cold’, Sir Edward told the BBC Today programme. ‘The latest data suggests it may be sharper than we needed. That is one of the biggest uncertainties facing the UK economy.’

Economists at HSBC also predicted that the UK could be the most effected outside North America by a US recession, while the Confederation of British Industry chief, Digby Jones, attacked the government for mounting tax bills and proliferation of red tape.

Order book growth remained subdued in December, according to the Chartered Institute of Purchasing and Supply figures, although figures rose for the fastest pace for five months.

UK companies blamed difficulty securing new business on the strength of the pound, but the recovery of the euro against the pound will benefit hard-pressed exporters.

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